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Technical Update: Important JPY Pairs


During its gradual recovery from 105.50, as portrayed by short-term ascending trend-line, the USDJPY presently trades above 50-day SMA for the first time since February; however, three-month old trend-channel resistance, around 110.50-55, becomes an important level for the pair to clear prior to visiting the 111 and the 38.2% Fibonacci Retracement of its January – May dip, at 111.70. Given the pair extends the short-covering rally beyond 111.70, the 112.60, 113.50 and the 114.15-20 are consecutive upside numbers that it could aim for. Moreover, the pair successful trade above 114.20 negates chances of its near-term downside and can further propel the northward trajectory towards breaking 115.00 round figure mark. Alternatively, pair's pullback from the present levels need to clear the 109.60 nearby trend-line support in order to test the 109.25-30 and the 108.20 supports while further downside below 108.20 can drag the prices to 107.50 and the 106.80 prior to making the pair re-test the early month lows around 105.50. However, mentioned channel's support-line, near 104.90, might hold its additional south-run captive.


Even if the EURJPY presently indicates a breakout of immediate symmetrical triangle resistance, at 123.80, which can trigger its short-term up-moves to 124.20, including 23.6% Fibonacci Retracement of its January – April decline, a broader downward slanting trend-line, forming part of descending triangle, around 125.00, might hold the pair's further upside captive. If the pair manage to clear the five month old triangle resistance, the 125.60 and the 126.50 are likely following resistances for the pair to mark. Given the pair's successful break above 126.50, the 127.20 might act as small barrier to clear before aiming the 128.00 resistance level. On the downside, 123.20 and the symmetrical triangle support of 122.95, are likely nearby supports that the pair might witness during its U-turn. However, pair's break below 122.95, could initial fresh downside pressure towards 122.50 and the 122.00 numbers before revisiting the broader triangle support-line of 121.40, which if broken makes the pair vulnerable enough to plunge towards 61.8% FE of the said downturn, near 120.00 psychological magnet.


NZDJPY's bounce from 72.50 presently struggles to clear the 38.2% Fibonacci Retracement of its March – May south-run, at 74.70; however, pair's break of the same could find it hard to clear the resistance-line of the short-term "Rising-Wedge" bearish formation, near 75.00. If the pair surpasses 75.00 round figure mark, the decline favoring formation gets negated and the same moves can achieve 75.50 and the 75.75 resistance levels, which are then likely to confront with 61.8% Fibo level of 76.00. Given the pair's sustained up-move beyond 76.00, it can target 77.00 resistance number. Meanwhile, 74.35 and the formation lower-line, around 74.00, become important supports to watch. Should the pair clears the 74.00, the bearish pattern gets confirmed, which then gives rise to renewed downside pressure towards 73.30 and to the 73.00 prior to dragging the prices towards 72.50 re-test.

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Monday, 23 May, 2016 / 2:43

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